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to the respective activity each brother primarily conducted.
Melvin and Russell generally paid the expenses related to the
respective activity each conducted. Many of the assets used by
BBP in its activities were not held in the partnership’s name.
Rather, these assets were either jointly owned by Melvin and
Russell or individually owned by one of them.
In late 1993 or early 1994, Melvin was diagnosed with
pancreatic cancer, and he subsequently died on March 4, 1994.
The partnership automatically dissolved upon Melvin’s death. In
the months leading up to Melvin’s death, some of the assets of
BBP were equally distributed between Melvin (or his children) and
Russell. At the time of Melvin’s death, Jean, Stephen, Kab, and
Todd believed that Melvin and Russell were equal partners in BBP.
For at least the taxable years 1980 through 1994, BBP filed
Forms 1065, U.S. Partnership Return of Income. Jules Feldmann
(Mr. Feldmann), a certified public accountant, prepared BBP’s
Federal income tax returns for those years.6 Melvin, Stephen,
and Kab provided Mr. Feldmann with financial information about
the oil and gas activity. Russell, Orlyn, and Gary provided Mr.
Feldmann with financial information about the farming activity.
The Forms 1065 for 1980 through 1994 reported that Melvin and
6Mr. Feldmann also regularly prepared personal income tax
returns for Melvin and Russell for several years. Mr. Feldmann
prepared Melvin’s return for 1993 and Russell and Clarice’s
returns for the years in issue.
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Last modified: May 25, 2011